Outsourcing in the Philippines: Types of Services and Its many Advantages

There are two factors that make offshore outsourcing a continuously growing industry in developing countries: the need of a host company (from a developed country, such as the United States or United Kingdom) to cut costs and maximize profits, and the capability of a third party organization to access and deliver digital data (fast and easy) almost anywhere around the globe through the use of global electronic internet network.

Offshore outsourcing refers to the practice of contracting out a business process to an external third party organization (located in another country). Besides cutting costs and maximizing profits as the main reasons why host firms resort to this business strategy, lack of individuals with the necessary skills is also cited as another essential factor – a concern that can easily be addressed by the chosen third party firm and at a much lower cost too. This is because cost of salary and operating costs in developing countries, considering currency conversion, is definitely so much lower compared to performing the same business functions in the host firm’s own country.

According to www.ppocoutsourcing.com, among the many developing countries, the Philippines is one country where offshore outsourcing has grown particularly fast. Some of the reasons for this include: the government’s increasing support on IT investment and the availability of good telecommunication infrastructures that are reasonably priced; high-quality locations at low cost; income-tax holiday offered by the government; and, a large pool of graduates (up to 400,000 every year) with good English communication skills and knowledge in ICT as potential candidates for needed job vacancies (this means that outsourced projects are handled by English speaking and highly-skilled professionals).

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